金融外文翻譯--風險投資在小型企業(yè)的作用

1、<p>　　3250單詞，18200英文字符，5236漢字</p><p>　　出處：Marjan Petreski. The Role of Venture Capital in Financing Small Businesses[J]. Social Science Electronic Publishing, 2006.</p><p><b>　　外 文 譯

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5、　The Role of Venture Capital in Financing</p><p>　　Small Businesses</p><p>　　Marjan Petreski</p><p>　　Abstract：Venture capital is an important alternative for companies that have di

6、fficulties accessing more traditional financing sources and it is a strong financial injection for earlystage companies that do not have evidence for persistent profitability yet. Firstly, deep prescreening process shoul

7、d be performed before investing in small, start-up business because of the information asymmetries, which in turn are the main cause for adverse selection and moral hazard problems. Well performed init</p><p&g

8、t;　　But what is more important is the conclusion that there is much more than just capital that flows from the investors to the organizations in which they invest. Indeed, fresh capital inflow is accompanied with the pro

9、cess of value-adding which provides the company with monitoring, skills, expertise, help and, basically, reputation for attracting further finance. Consequently, the role of the venture capital in financing small busines

10、s is tremendous. The paper sheds light on these issues.</p><p>　　Keywords： Venture Capital, Small Business, Entrepreneurship, Financing</p><p>　　1. Introduction</p><p>　　Financing o

11、pportunities for small businesses have grown in the last few decades. On the other hand, entrepreneurships are crucial for the development of every national economy. Therefore, financing a small business is an issue whic

12、h continuously captures academic interests.</p><p>　　Great part of the literature acknowledges that entrepreneurship is the fundament of the economic growth and productivity performance (OECD, 2004) and, as

13、such, it triggers creating innovative small firms, which in turn add huge “blocks” in building the national competitiveness (Pandey et al, 2003). But, on the other hand, because of the high start-up risk and informationa

14、l inconsistency, small firms are often highly vulnerable (Berger and Udell, 2002) and face with a harsh financing issues due t</p><p>　　This is the point where the role of venture capital becomes important i

15、n financing small businesses. Moreover, economists agree that venture capital “provide[s] a boost of adrenaline” (O'Brien, 2001, p.9) for small start-up, innovative and dynamic firms, especially in the high-tech indu

16、stry (Bottazzi and Rin, 2002). Therefore, it is said that venture capital fuels the growth and development of entrepreneurships. This paper aims to evaluate the contribution of venture capital for such entities an</p&

17、gt;<p>　　This is achieved by emphasizing the basic role of the venture capital in financing small business in section one. Than, venture capital is viewed as a box of services which are also important as the very

18、capital provided is. Moreover, this is acknowledged as a main contributor toward the firm’s professionalization. Finally, in the last part, certain space is devoted to the less attractive side of the venture capital.<

19、/p><p>　　2 Why small start-up firms (must) choose venture capital financing? Venture capital primary role</p><p>　　Even though the process of brainstorming could be really productive and endless, e

20、ntrepreneurs must often think about the financial side of their idea. Indeed, one could have brilliant idea for starting up a smart business, but launching that idea needs fuel – this makes him troubles. Therefore, such

21、“poor” entrepreneurs must rely on external financing in order to start their business (Lulfesmann, 2000). Indeed, young, especially innovative and fast growing businesses find it very difficult the </p><p>　

22、　“Venture capital is thought to be an important alternative for companies that have difficulties accessing more traditional financing sources” (Manigart et al, 2002, p.103-104) and it (venture capital) is a strong financ

23、ial injection for early-stage companies that do not have evidence for persistent profitability yet (Kleberg, 1998). In other words, venture capital is needed to trigger, maintain and to speed up the small enterprise’s gr

24、owth and its performance, and therefore to result in improved</p><p>　　What is sure, once it has been agreed, venture capital flows in the company and enables its start-up. This is the point when the idea be

25、comes reality. But, not only providing the capital, venture capital injection brings more benefits for the venture-backed company than one could think of. Manigart and Sapienza (1999; cited in Manigart et al, 2002) point

26、 out “its roles of pre-investment screening, post-investment monitoring and value-adding” (p.104). Critically said, venture capitalist becomes a</p><p>　　Why invest in promising business? – Venture capitalis

27、t perspective</p><p>　　It is vast agreed and practically proven that venture capitalists invest only in promising projects. At the very beginning, investors are deeply sceptical, bad mood reasoning with more

28、 answers “no”, rather than “yes” (Mason and Rogers, 1997; cited in Mason and Harrison, 2004). Furthermore, venture capitalists screen potential investments in regards to the collecting information about business, its mar

29、ket approach, management team or entrepreneur (Berger and Udel, 1998; cited in Baeyens and Manig</p><p>　　Pre-screening phase, accordingly, enables platform for contracting on a sustainable basis. This means

30、 that the investment will surely bear fruit later. Thus, venture capitalists provide the capital and begin with creating new value, which they can extract benefits for themselves from. Consequently, the role of the ventu

31、re capitalist is dual: careful selection of promising firms or projects and than close observation over time (Kaplan and Strömberg, 2001a; cited in Hellmann and Puri, 2002a). The </p><p>　　4 Venture ca

32、pital – “rich services package” and innovation stimulator</p><p>　　Even though the main role of venture capital is feeding small, innovative and fast growing firms with fresh capital, many articles (Giudici

33、and Paleari, 2000; Kortum and Lerner, 2000; Bottazzi and Rin, 2002; Hellmann and Puri, 2002a; Sætre, 2003; Wilson, 2005) suggest that venture capital backed firms receive many other services from venture capitalist

34、which are as much important for the entrepreneur, as the very capital infused is.</p><p>　　In their article, Giudici and Paleari (2000) argue that as the capital is introduced in the firm, venture capitalist

35、 gains power to dynamically impinge on the management process in the firm in many different ways. Vast literature recognizes the last as a process of adding new value to the venture capital backed company. Indeed, the pr

36、ocess of pre-investment screening discussed above, aims to provide stabile platform for investing in a company where the venture capitalist is convinced that he can</p><p>　　The mission of the venture capita

37、list is to raise the business and not just to get reward, because as the business is raised, the rewards will come automatically (Pandey et al, 2003). Instead of that, “riding” together with the entrepreneur is more cruc

38、ial for being rewarded. Broadly speaking, raising a business means that venture capitalist provides complete oversight to the firm, in terms of provided services, help and guidance for the entrepreneur (Lerner, 1995). In

39、deed, venture capitalist in</p><p>　　One of the most important services for the venture capital backed firm is the expert</p><p>　　advice that venture capitalist offers to the entrepreneur. Inde

40、ed, investor acts asentrepreneur’s mentor, because, investing in nearby located start-up firms, means that he has sufficient knowledge for the industry, and therefore he can be involved in designing strategies, hiring th

41、e best executives and enhancing the network of contracts with suppliers and costumers (Bottazzi and Rin, 2002; Hellmann and Puri, 2002a). According to Jungwirth and Moog (2004), this specific knowledge establishes bas<

42、;/p><p>　　Moreover, value-add process facilitates the venture capitalist as a firm’s promoter and consultant (Repullo and Suarez, 1998), because of his richness of expertise, competencies, experience and reputa

43、tion (Sætre, 2003; Wilson, 2005). In the same line of thinking, Fried and Hirish (1995) also agree that venture capitalists create value by providing “networks, moral support, general business knowledge and discipli

44、ne” (p.106). Kaplan and Strömberg (2001b) further broaden the areas where the investo</p><p>　　The article of Hellmann and Puri (2000; cited in Bottazzi and Rin, 2002) offers good explanation of the pro

45、cess of professionalization. Besides above mentioned features, they point out the speed of developing and bringing ambitious product to the market by venture backed companies. Moreover, this is crucial to achieve market

46、leadership, especially among innovative firms (Hellmann and Puri, 2002a). “Venture backed companies are, in fact, found to pursue more radical and ambitious product or proce</p><p>　　All in all, contribution

47、 of the venture capital to the start-up firm is considerable. Besides many features provided by the venture capitalist discussed above, venture capital has one more important attribute: providing credibility, it attracts

48、 new funding. Baeyens and Manigart (2003) explain this by the fact that, through screening, observing and value-adding, venture capitalists reduce the information asymmetries and financial risks, and therefore adjoin leg

49、itimacy to the venture backed compan</p><p>　　Up to now, one may conclude that venture capital funding is brilliant way of raising new business and realizing one’s “imagination”. Indeed, the role of venture

50、capital in financing small early-stage business is noteworthy, but this way of funding new business has its “dark side” too. This is examined further.</p><p>　　The “dark side” of the venture capital funding&

51、lt;/p><p>　　Once the venture capitalist and the entrepreneur have ended up the initial negotiations, and the former introduced its capital in, joint efforts should lead toward improved performance and higher ex

52、pected returns. Both sides develop and contribute different types of knowledge and skills, “allowing each party to exploit its comparative advantage” (Cable and Shane, 1997, p.143). Moreover, confidence is crucial in ent

53、repreneur - venture capitalist relationship and corresponds with a certain level o</p><p>　　As a result, agency problems often occur. “Conflicts arise in such situations because the entrepreneur may have inf

54、ormation unknown to the venture capitalist and may choose to shirk or overinvest, creating agency costs” (Barry, 1994, p.6). But, Admati and Pfleiderer(1994) describe venture capitalist as well-informed, so it is high pr

55、obable that agency problems will be avoided in such risky investments.</p><p>　　Whether it is, hedging itself is the most common strategy for the venture capitalist. Stage financing is the most suitable moni

56、toring and control device, acting as a buffer versus entrepreneur’s opportunistic behaviour, because each time new capital is introduced in the firm, contracts’ renegotiation arises as a necessity (Giudici and Paleari, 2

57、000). Renegotiation leads toward reporting what has been done until now, and what is the basis for the further running of the firm. Instalment financing </p><p>　　Conflict of interests often results in anoth

58、er form too. Namely, the treatment of the firm’s founder (entrepreneur) is also the most controversial issue in venture capital (Hellmann and Puri, 2002a). Even though there are many possibilities ranging from those wher

59、e entrepreneurs claim that venture capitalists are “notorious for removing founders from the position of CEO and bringing in an outsider” (Hellmann and Puri, 2002a, p.21), to those where venture capitalist counts the cha

60、nge as contribut</p><p>　　The above findings are supporting what Barry (1994) acknowledges in his article, that venture capitalists actively identify and recruit members of the management team in the venture

61、 backed company. In other words, they usually reshape management team. Moreover, investors tend to hold a board or managerial seat in the firm in which they have invested, in order to access closer oversight and to reduc

62、e agency problems (i.e. possess overall control if difficulties occur) (Lerner, 1995). At the end, </p><p>　　All in all, albeit venture capital has its “bad” side too, it comes up that it is not too bad: it

63、is only a tool for control and, therefore, for better performing. But, having the bad side in account, however, the venture capital’s role in financing small businesses is not diminished. Rather than that, potential conf

64、licts between investor and entrepreneur could be avoided with confident and trustworthy behaviour, where the role of the entrepreneur and that of the venture capitalist are going in </p><p>　　Conclusion</

65、p><p>　　Several conclusions could be extracted from the arguments supplied above. Firstly, deep pre-screening process should be performed before investing in small, start-up business because of the information

66、asymmetries, which in turn are the main cause for adverse selection and moral hazard problems. Well performed initial scan ensures good investment. Seed capital provided than enables the firm’s set off.</p><p&

67、gt;　　But what is more important for the purpose of this paper is the conclusion that “there is much more than just capital that flows from the investor to the organizations in which they invest” (Sætre, 2003, p.85).

68、 Indeed, fresh capital inflow is accompanied with the process of value-adding which provides the company with monitoring, skills, expertise, help and, basically, reputation for attracting further finance. Consequently, t

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